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GTAP Resource #2788

"India, Brazil, South Africa and China: Is the South Big Enough?"
by McDonald, Scott and Dirk Willenbockel

Global trade is dominated by developed economies (the global ‘North’) and the majority of operational trade agreements involving developing or middle income countries (the global ‘South’) have included at least one developed country partner. Arguments that advocate pure South-South agreements as a preferable option for developing countries.have routinely met with the basic objection that the countries of the South are not economically large or developed enough to make such agreements desirable. But various developments over the last decade or so have stimulated renewed interest in the idea of South-South agreements. Not only have the major economies of the South realised high growth rates, their manufacturing capacities have become increasingly sophisticated. This suggests that South-South trade may be increasingly viable both in terms of the scale and content of trade. Moreover, the arguably increasingly aggressive approach of developed countries towards trade agreements with developing countries has given extra incentives to policy makers in South to search for alternative trade opportunities.
Against this background there has been bilateral dialogue between policy makers in the major economies of the continents of the South – Brazil in South America, South Africa in Africa, India in South Asia and China in East Asia – and exploratory negotiations to establish various bilateral trade agreements. To which extent do such South-South trade agreements offer prospects for sustained economic benefits? This study explores this issue.
The analyses reported in this paper are derived using the GLOBE model with a 27 sector and 14 region aggregation. The simulations evaluate the potential benefits from the development of trade agreements between Brazil, South Africa and India (IBSA) and IBSA and China and compare these South-South integration scenarios with a multilateral trade liberalisation scenario under a potential Doha Round agreement.

Resource Details (Export Citation) GTAP Keywords
Category: 2008 Conference Paper
Status: Published
By/In: Presented at the 11th Annual Conference on Global Economic Analysis, Helsinki, Finland
Date: 2008
Version: 1
Created: Willenbockel, D. (4/16/2008)
Updated: Willenbockel, D. (4/16/2008)
Visits: 2,552
- Preferential trading arrangements
- Economic development
- Asia (East)
- Asia (South-Central)
- Africa (Southern)
- South America

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